Compensation system of Berger paints Bangladesh Ltd.

Subject: HRM370
Section: 02

Submitted by-

Group Name: M7

Serial no. Name Id no.

01 MD. RUBEL MIAH 1320935
02 SYED ASHIQUE AHMED 1030149
03 MD. ATIQUR RAHMAN 1230719
04 MD. MUSTAFIZUR RAHMAN 1310111
05 ALI AHMED BADHON 1320886
06 MD. SAIFUL ISLAM 1320928
07 MD. SHABBIR HAQUE 1220048

Submitted to-

Mr. Monzoor Morshed

Lecturer, School of Business
Independent University, Bangladesh
 Letter of Transmittal
2nd August 2015
To
Monzoor Morshed
Lecturer, School of Business
Independent university Bangladesh
Basundhara, Dhaka
Subject: Permission to submit Term paper report on Compensation system of Berger Paints,
Bangladesh Ltd.
Dear Sir,
We are delighted to submit our term paper report on Compensation system of Berger Paints
Bangladesh Ltd. We tried our best to provide as much as relevant information regarding our
topic.
So we, therefore hope that, you will find everything needed to complete the assignment.
Sincerely,
The members of M7
Name ID Signature
Md. Rubel Miah 1320935
Syed Ashique Ahmed 1030149
Md. Atiqur Rahman 1230719
Md. Mustafizur Rahman 1310111
Ali Ahmed Badhon 1320886
Md. Saiful Islam 1320928
Md. Shabbir Haque 1220048

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Table of Contents
Letter of Transmittal..............................................................................................................1

Executive Summary:..................................................................................................................3

Group member’s contribution:...................................................................................................5

Methodology:.............................................................................................................................5

Sources of Data Collection:...................................................................................................5

Limitations:................................................................................................................................6

Literature review:.......................................................................................................................6

Background of the company:.....................................................................................................8

Social Activities:......................................................................................................................10

Interview profile:......................................................................................................................11

Findings:...................................................................................................................................13

Recommendation:....................................................................................................................15

Conclusion:..............................................................................................................................15

Appendix:.................................................................................................................................16

References:...............................................................................................................................16

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Executive Summary:
Berger Paints is one of the oldest names in the paint industry, yet, it is one of the most
technologically advanced companies in the country. It is constantly striving for innovating
superior quality products and services. With more than 250 years of rich heritage, Berger
manufactures world class paints for all kinds of substrates and also provides unparalleled
services. 

Berger Paints Bangladesh Limited is not only a company with reputation but is a name to the
dynamic industry which has history and the pride to be the best at what it does. Berger Paints
Bangladesh Limited often referred to as BPBL is considered to be the market leader in
Bangladesh and has a wide array of products such as Regular Coatings, Industrial Paints,
Marine Paints, Outdoor Paints Protective, Color Bank, Textured Coatings, Heat Resistant
Paints, Roofing Compounds and Epoxies and Powder Coatings. BPBL gives a
comprehensive and sustainable painting solution and providing the best customer support. It
connects consumers to technology through specialized services. It has a strong distribution
Networking, Berger has reached almost every corner of Bangladesh. Whether it is World-
class range or durability, BERGER is always ready to answer to all weather conditions. It
strives for the improvement of Quality of Work Life (QWL) with competitive advantage.

Berger Paints Bangladesh Limited is basically managed by its Finance, Supply Chain, IT,
Budget, Marketing & Sales departments. The manufacturing units at Dhaka and Chittagong
are also the strategic advantages that it has because of their location. Berger’s corporate
strategy is to build larger market share through providing quality and speedy service. Its
primary focus is to strengthen its current position by provided value added customer service.
BPBL is committed to get highest consumer satisfaction. BPBL is committed to express itself
as an ethical and socially responsible company by producing environment friendly paints, in
an environment friendly production plants. BPBL is made up of well experienced, well
trained, highly educated officials and very dedicated and experienced employees along with
the stakeholders. BPBL is nothing without its valued customers. So, to serve the best to the
customers has been on top of all priorities. The actual information provided in this report was
collected from two different sources, namely primary and secondary source. The information
in the report in connection to the treasury functions were collected from primary sources
while that for sales analysis was gathered from different published reports within the
organization and from the annual reports .

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We are going to focus on compensation system. It results from the allocation, conversion and
transfer of a portion of the income of an organization to its employees for their monetary and
in-kind claims on goods and services. (Richard I. Henderson)

Compensation system will differ within the hierarchy of Berger Paints Bangladesh Limited.
The Exempt, the Senior management and Operating management who are basically
executives, top-level managers, midlevel operating managers, lower-level managers,
professionals, administrators and sales personnel. The exempts are usually benefited both
monetarily and with in-kind payments. After Reviewing the Compensation policy of BPBL it
is clearly seen that they have a very standard and fair compensation policy. But to make it
more polished they could take some steps. They can use scatter diagram method to determine
their compensation policy. It is also seemed that, their pay grade overlap is low. To make it
more suitable they can increase the overlap. It has been noticed that, they are trying to
implement cost minimization in compensation policy. But we recommending that they have
to focus to minimize the cost in other expenses and utilities. Another thing they can do is
decreasing the base salary below the thresher hold level and increasing the performance
bonus over the thresher hold level.

Berger's one of the prime objectives is to provide best customer support-connecting

consumers to technology through specialized services like free technical advice on surface
preparation, color consultancy, special color schemes etc. To bolster customer satisfaction,
Berger offers Home Decor Service from where one can get an array of services pertaining to
painting.  Apart from business, Berger Paints has added another dimension to its social
responsibilities by contributing to the well-being of the autistic children in Bangladesh from
2009. Berger Paints Bangladesh Limited has been promoting the young and creative talents
of the country through Berger Young Painters’ Art Competition (BYPAC), Berger Award for
Excellence in Architecture (BAEA).

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Group member’s contribution:

Name ID Contribution
Md. Atiqur Rahman 1230719 Background of the company
Md. Rubel Miah 1320935 Methodology, limitations,
literature review & typing
Md. Mustafizur Rahman 1310111 Social activities
Ali Ahmed Badhon 1320886 Interview details
Syed Ashique Ahmed 1030149 Major achievements
Md. Saiful Islam 1320928 Findings
Md. Shabbir Haque 1220048 Recommendation &
conclusion

Methodology:
Methodology refers to the essential part of the study and the process of collecting information
and arranging it in terms of the relevant issues of the study. It is designed in a way so that it
correspondents to achieve the objectives of the study. The actual information provided in this
report was collected from two different sources, namely primary and secondary source. The
information in the report in connection to the treasury functions were collected from primary
sources while that for sales analysis was gathered from different published reports within the
organization and from the annual reports.

Sources of Data Collection:

-Berger Paints Bangladesh Limited, Annual Report 2010

-Berger Paints Bangladesh Limited, Annual Report 2012

-Berger Paints Bangladesh Limited, Prospectus

-Video documentary prepared by Berger Paints Bangladesh Limited

-Company Database

-Company website

Limitations:
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 There were some difficulties in obtaining necessary information. Such as-

 Time & cost was a major limitation

 Lack of commitment between members
 Long vacation which resulted a lack of communication & teamwork
 Some rules & regulations of the company which didn’t allow us to get some vital
information( pay structure)

Literature review:
The reward system of an organization includes anything that an employee may value and
desire and that the employer is able or willing to offer in exchange for employee
contributions on top of compensation. The tree diagram of reward system is-

Reward System

Compensation Non-Compensation

Both Physical and

Monetary In kind Payment psychological

Cash Payment Deferred Payment Psychological Reward

Compensation system differs according to the hierarchy of Berger Paints Bangladesh

Limited. The Exempt, the Senior management and Operating management who are basically
executives, top-level managers, midlevel operating managers, lower-level managers,

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professionals, administrators and sales personnel. The exempts are usually benefited both
monetarily and with in-kind payments. The Non-exempts are compensated hourly, regular
employees are full time or part time and contingent –temporary employees are contractual
employees. Such non exempts usually receive monetary more than in-kind payments in
Berger Paints Bangladesh Limited. Special groups which include employees in foreign work
sites and Board of directors receive monetary as well as in- kind payments in Berger Paints
Bangladesh Limited.

Monetary payments are monetary claims on goods and services and wages or salaries paid
to an employee in the form of money, or form that is quickly and easily transferable to money
at the discretion of the employee. Such as coins or paper money, or in less tangible form of
checks or credit cards that have value in use and simplify exchange transactions. (Richard I.
Henderson) There are two types of monetary payments-

Cash payments are earned at the present time. In Berger Paints Bangladesh Limited, cash
payments are made on the basis of cost effectiveness. In cost effectiveness the BPBL tries to
minimize the costs behind the employees. It means the employees will be paid in a good
margin, but it will also be cost effective for the organization. Otherwise, if the salaries are
paid without any sorts of judgment or study, then it will be expensive for the organization.

Deferred payment: Are earned but not paid immediately but paid later in some future time.
It mostly depends on the employee rank.

In-Kind Payments constitutes goods or services that are used in lieu of money and that
provides an equivalent value for what has been offered or received. The value of any in-kind
payment to a specific employee depends on the employees perception of its worth. Individual
perception relates to a range of demographic characteristics as well as to the physical and
emotional state. In skill based compensation, the organization pays for the level of skill of
the employees. These positions are very important for the BPBL. There are shortages of
skillful people in our country. So the BPBL tries to hire skillful employees to serve for them
and help to achieve goals. In this company these people are paid in a higher range compared
to the other positions of the organization. Top level managers, production officers, technical
persons are mainly labeled as skillful people. Because the technical people help the company
with their production skills, top level managers are counted as the resource persons with vast
knowledge of the production and business sectors. Then the managers are also skillful

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persons who have a lot of experiences with other companies and have good communication
skills with well managerial skills to handle all kind of employees of the company. In skill
based compensation, the skills of the people are emphasized. Their experiences, knowledge,
and other useful skills are paid.

Background of the company:

Berger Paints is one of the oldest names in the paint industry, yet, it is one of the most
technologically advanced companies in the country. It is constantly striving for innovating
superior quality products and services. With more than 250 years of rich heritage, Berger
manufactures world class paints for all kinds of substrates and also provides unparallel
services. 
Berger’s inception was laid out in 1760 by a German national named Louis Berger, who
started dye and pigment making business in England. Louis involved his family into the
business and eventually changed the status of the company to Louis Berger & Sons Limited.
The company grew and expanded rapidly with a strong reputation for excellence in
innovation and entrepreneurship. In the initial years, Louis successfully refined the process of
manufacturing Prussian blue, a deep blue dye. This dye was widely used for the uniforms of
many European armies of that time. Production of dyes and pigments evolved into production
of paints and coatings, which till today, remains the core business of Berger. The company
grew rapidly, by establishing branches all over the world and through mergers and
acquisitions with other leading paint and coating manufacturing companies.  Berger Paints
started ‘painting’ Bangladesh since independence. Over the past few decades, Berger has
evolved and transformed itself in becoming the leading paint solution provider in the country
with a diversified product range that caters to all your painting needs.  Berger has heavily
invested in technology and Research & Development (R&D) compared to any other
manufacturer in this market. Investment in technology and plant capacity is even more
evident from the establishment of Powder Coating and Emulsion plants at the Dhaka factory.
The state-of-the-art Dhaka factory is an addition to Berger's capacity, making it the paint
giant in Bangladesh. It sources raw materials from some of the best known names in the
world. The superior quality of Berger's products has been possible because of its advanced
plants and strict quality controls that match international standards.  With its strong
distribution network, Berger has reached almost every corner of Bangladesh. Nationwide
Dealer Network, supported by 8 Sales Depots strategically located at Dhaka, Chittagong,

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Rajshahi, Khulna, Bogra, Sylhet ,Comilla and Mymensingh has an unmatched capability to
answer to paint needs at almost anywhere in Bangladesh.  Berger's one of the prime
objectives is to provide best customer support-connecting consumers to technology through
specialized services like free technical advice on surface preparation, color consultancy,
special color schemes etc. To bolster customer satisfaction, Berger offers Home Decor
Service from where one can get an array of services pertaining to painting.  The product
range includes specialized outdoor paints to protect against adverse weather conditions, Color
Bank, Superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing
Compounds, Epoxies and Powder Coatings. In each of these product categories, Berger has
been the pioneer. Besides, Berger offers illusions-the first designer paint solution in
Bangladesh. The company also launched Power Bond adhesive, lnnova Wood Coating in
collaboration with Sherwin-Williams, Vehicle Refinish in collaboration with world renowned
PPG-USA, Texbond binder to cater to the growing needs of the customers. 

Apart from business, Berger Paints has added another dimension to its social responsibilities
by contributing to the well being of the autistic children in Bangladesh from 2009. Berger
Paints Bangladesh Limited has been promoting the young and creative talents of the country
through Berger Young Painters’ Art Competition (BYPAC), Berger Award for Excellence in

Architecture (BAEA), Berger Award Program for the Students of Architecture of BUET
(BASAB), Scholarship Program for the students of Architecture Discipline, Khulna
University. 

Berger Paints Bangladesh Limited (BPBL)’s major milestones include:

1950 – Started operation in East Pakistan by importing paint from UK

1970 – Establishment of Chittagong Factory
1980 – Named as Berger Paints Bangladesh Ltd. From Jenson & Nicholson (J&N)
1995 – Establishment of Double Tight Can Manufacturing Plant
1999 – Establishment of most modern State-of-the-Art Paint Production Plant in Dhaka
2002 – Construction of own building for the Corporate Office in Dhaka
2004 – Establishment of Powder Coating Plant
2005 – BPBL went Public

Vision: To be the most preferred brand in the industry ensuring consumer delight.

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Mission: We shall increase our turnover by 100 percent in every five years. We shall remain
socially committed ethical company.

Social Activities:
In the increasingly conscience-focused market places of the 21st century, the demand for
more ethical business processes and actions is increasing day by day. Berger Paints
Bangladesh Limited chalked out CSR policies that ensure business operations that follow
ethical standards. They just do not strive for making money but do business in keeping the 3
Ps in mind -people, planet and profit. They are doing different types of social commitment.

Berger Young Painters' Art Competition:

Berger Paints Bangladesh Limited has been patronizing art for more than a decade. In
continuance of its commitment, Berger Paints has been organizing Young Painters' Art
Competition (BYPAC) since 1996. This particular initiative of Berger Paints has highly
encouraged the young aspiring artists of Bangladesh. Every year, young painters from
different parts of Bangladesh participate in the competition. The winners are selected by a
Jury board comprising of prominent artists of the country. For the past two years Berger
Paints has also been giving Lifetime Achievement Award to venerated artists for their
immense contribution and influence in the field of art of Bangladesh.

Berger Award for Excellence in Architecture:

Berger Paints Bangladesh Limited contributes in the field of Architecture by arranging
Berger Award for Excellence in Architecture. Berger introduced the Berger Young
Architects' Award back in 2003, the first of its kind in Bangladesh. To widen the horizon, in
2007, the award was classified into two categories, namely "Berger Award for Excellence in
Architecture" and "Berger Young Architects' Award", so that the award can inspire the
mature as well as the young architects. The winners are selected by a jury board with eminent
architects as its members. The event is arranged bi-annually. Berger Paints also arranges
exhibitions showcasing the projects submitted in the competition.

Scholarship Program for BUET students:

As part of its corporate social responsibility, Berger Paints introduced Berger Award Program
for the Students of Architecture BUET (BASAB) in 2006, in collaboration with the
Department of Architecture, BUET to promote the young architects, to give them a real life
experience and inspire them to go further.

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Interview profile:
Questions asked during the interview-

In Berger paints Bangladesh we asked for not only compensation related questions but also
nonprofessional such as about the interviewee personal life as well as their likings and
disliking. But most of the time they ask for compensation related questions.

The kinds of questions usually ask in the interview of BPBL is given below:

Nonprofessional: Some of the nonprofessional questions are-

 Tell me something about yourself?

 Share with us a worst experience in your life?

Compensation related: Some compensation related questions are-

 What is Workers' Compensation?

 Who pays for Workers' Compensation Insurance?
 What kind of bonus paid for employer?
 How many allowances BPBL offer for the employee?
 Is there any payment company offer for retention and motivation?

As we mentioned earlier about some limitations about this report, we didn’t get the answer to
the most of the above mentioned questions. As we know, compensation structure varies from
company to company & competitors always try to beat each other with a better salary, this is
why this information is mostly classified.

They also gave us some information about their designation model.

Line Structure

 Senior Manager
 Manager
 Officer
 Contract Officer
1. Salary Components (Monthly):
 Basic Salary

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  Medical Allowance
 Personal Allowance
 Conveyance Allowance
 Salesman Allowance (For Sales force only as per different grade)
2. Salary Components (Yearly):
 Festival Bonus (Four times x Basic)
 Leave Fare Assistance (Different entitled as per grade)
3. Short Term & Long Term Benefit/Incentives:
 Group Life Insurance
 Medical Insurance
 Provident Fund
 Profit Bonus
 Complimentary Meal
 Transport Facilities etc.

Yes. They are satisfied as Berger Paints provide the best salary offer in the Industry hence the
retention rate is high.

Chairman

Managing Director

Sr. GM Director Finance

& Company Secretary
MKT &

GM GM- GM- GM- GM- GM- GM- Fin. GM-

Sales MKT HR Supply Manufac Treasury Plan. & BPRC

GSM- GSM- GSM- Plant Manager Plant

Trade Industrial Project, DHK Factory Manager

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Findings:
Berger Paints Limited Bangladesh (BPBL) is following a compensation package that helps
them to retain the FTEs (full time employees) and the casuals. Though they are on a track to
compensate the employees in a competitive manner, but they try to give a bit higher salaries
and wages to the employees to remain as a competitive organization in the market.

Skill-Based Compensation:
In skill based compensation the organization pays for the level of skill of the employees.
These positions are very important for the BPBL. There are shortages of skillful people in our
country. So the BPBL tries to hire skillful employees to serve for them and help to achieve
growth. Skillful people are like diamonds for the BPBL. In this company these people are
paid in a higher range compared to the other positions of the organization. Top level
managers, production officers, technical persons are mainly labeled as skillful people.
Because the technical people help the company with their production skills, top level
managers are counted as the resource persons with vast knowledge of the production and
business sectors. Then the managers are also skilful persons who have a lot of experiences
with other companies and have good communication skills with well managerial skills to
handle all kind of employees of the company. In skill based compensation, the skills of the
people are emphasized. Their experiences, Knowledge and other useful skills are paid.

Economic environment:
In today’s world the economic environment plays a vital role for any organizations.
Whenever the economic conditions affect the whole market, then it is a huge matter for the
BPBL. For example, we are seeing the time of recession, BPBL is also thinking to cost
minimizing the salary levels. But they cannot do this easily as the pressures will be higher.
But they are trying to cope up with the current situation.

Discount:
As a BPBL employee he or she always gets some discount in some particular product.
Suppose for the Singer Products the BPBL employees gets 5% discount from the tagged
price. For the Transcom international (electronic products) they get 10% discount.

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Company share:
BPBL allows their employees to buy the share through them at a lower price. The benefit is
that if there any loss incurred then the loss will be beard by the BPBL but for profit there are
no bindings. The employees will get the full percentage of their profit from the share.

Paints:

All permanent employees are entitled to purchase certain quality of paint at 25% discount on
MRP every year and executive are entitled for free paint for painting their house every three
years.

Profit Bonus:

All performance employees of the company are entitled for profit bonus, which is declared in
the AGM.

Target Bonus:

All the employees of the company are entitled for target bonus, which is determined by the
company’s executive.

Festival Bonus:

All the employees of the company are entitled for different kind of festival

bonuses. Like: Eid-ul-fitr, Eid-ul-azha, Durga puja etc.

Allowances:
In addition to the basic salary there are a number of allowances. Every employee receives
each month as follows:

Housing Rent Allowance:

This is a monthly allowance which is added to their basic salary according to the respective
grade of employee. Transport Allowance: This may in the form of a cash payment or the
company provides a car for officers. Executives have the option to cash out the car benefit.

Leave Allowance:

For the leave allowance employees have to apply 2 weeks before and request for this
allowance to be paid. This will be paid according to the respective grade and once in a year.

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Medical Allowance:

Employees are allowed for medical expenses for their spouse/partner and children. The
company will pay up to allowance for medical consultations and examinations, cost of drugs,
medicines, injections, and other appropriate medical treatment.

Late Shift Allowance:

Certain jobs such as when more production is needed may require working hours or also may
require for starting production shift such as evening or night shift. Staff working such hours
will receive an allowance

Promotion:

Employees are rewarded according to their performance. Every employee has a desired target
and their work is designed and forwarded to obtain those desired positions.

Recommendation:
After Reviewing the Compensation policy of BPBL it is clearly seen that they have a very
standard and fair compensation policy. But to make it more polished they could take some
steps. They can use scatter diagram method to determine their compensation policy. It is also
seemed that, their pay grade overlap is low. To make it more suitable they can increase the
overlap. It has been noticed that, they are trying to implement cost minimization in
compensation policy. But we recommending that they have to focus to minimize the cost in
other expenses and utilities. Another thing they can do is decreasing the base salary below the
thresher hold level and increasing the performance bonus over the thresher hold level.

Conclusion:
Berger, one of the oldest names in the paint industry, began its business in Bangladesh since
independence. Over the decades, Berger has evolved as the leading Paint Solution Provider in
Bangladesh and has diversified itself into almost every sphere of the industry, from
Decorative paints to Industrial paints to marine paints. Berger Paints Limited Bangladesh
(BPBL) is following a compensation package that helps them to retain the FTEs (full time
employees) and the casuals. Though they are on a track to compensate the employees in a

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competitive manner, but they try to give a bit higher salaries and wages to the employees to
remain as a competitive organization in the market.

Appendix:
Comprehensive: Complete

Sustainable: Continue

BPBL: Berger Paints Bangladesh Limited

Competitive advantage: Some special advantage over competitors

Thresher: Combine

References:

1. www.google.com
2. Berger Paints Bangladesh Limited Annual Report 2010
3. Richard I. Henderson. (2012-2013). The Reward System: Compensation and Non-
compensation Dimensions. Compensation Management in a Knowledge Based
World. (pp .14-21) India, Delhi. Pearson Education, Inc and Dorling Kindersley
Publishing, Inc.

4. www.bergerbd.com
5. http://en.wikipedia.org/wiki/Berger

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